Unleash the untapped talent of rural entrepreneurs

 

Rural America was once a hotbed of entrepreneurship. Small town entrepreneurs developed creative strategies for electrifying remote communities, invented the electric motor and the dishwasher, and started successful software companies from the early days of the digital economy. But rural entrepreneurship has been on the decline for decades, and rural America has struggled to bounce back from the 2008 recession in part because entrepreneurship is lagging so far behind. 

During National Entrepreneurship Week 2019, it’s time to renew our commitment to supporting rural entrepreneurs to unleash the untapped talent and ideas that exist in small towns across the country. 

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Rural job creation has been stifled for years. Startups are now densely concentrated in cities, in contrast to previous periods of economic recovery: between 2010 and 2014, half of all startups occurred in just 20 counties with 17 percent of the country’s population.

During the economic recovery from 1992 to 1996, half of all new startups occurred in 125 counties accounting for 32 percent of the U.S. population. What’s more, less than 1 percent of venture capital goes to entrepreneurs in rural areas today. Meanwhile, the talent and creativity in small towns is going untapped at the same time that traditional tech centers are struggling to find talent.

The situation is serious, but it can be solved. Digital economy jobs are the largest opportunity for scalable entrepreneurship — and the infrastructure needed to support a rural entrepreneurship renaissance is increasingly available. Gigabit speed broadband is now available in towns that are home to 10 million Americans — a distributed workforce amounting to another New York City.

Startups are unlikely to succeed in isolation, but by creating digital economy ecosystems that encourage interactions between entrepreneurs and remote workers, and developing a network of innovation hubs working together, a world of opportunities begins to open up. I’ve seen it work. As part of the team that grew a Vermont-based software company to 120 employees during the 1990s, I saw first-hand how a small-town company can become a player in the global economy.

Places like Red Wing Minnesota’s Red Wing Ignite and Traverse City Michigan’s 20Fathoms are proving that you don’t need huge populations to support small-town entrepreneurs, you just need a strong internet connection and innovative people working together to solve problems. Rural communities with the assets and abilities to compete in tech and innovation are able to play an active role in the new economy. As these innovation centers work together in a network, they are more likely to draw the attention and investment from Silicon Valley venture capitalists and tech company partners.

As more small towns take steps to grow innovation economies, it’s important to dispel the old myths that the rural-driven tech is limited to traditional sectors like agriculture or forestry. Small towns can be hubs for innovative entrepreneurship of all kinds. Kingland Fintech, an accounting and fintech company founded in Clear Lake, Iowa (population 7,700), has grown to several hundred employees in five locations on two continents, while maintaining its small-town headquarters. Innotopia, a resort management software company founded in Stowe, Vermont (population 4,300) leverages outdoor assets like skiing and biking to attract and retain more than 100 employees at two rural Vermont locations.

Other organizations are also taking steps to support rural entrepreneurship. The Kauffman Foundation and Siegel Family Endowment were among the first national foundations to recognize the unique challenges for rural entrepreneurs and to work to reverse the trend. There are also promising signs on the public policy front. The 2018 farm bill includes support for rural entrepreneurs through the Rural Innovation Stronger Economy (RISE) program. RISE will help rural entrepreneurs create the digital economy jobs that communities need to be resilient as automation shifts the employment landscape. Funding this program and continuing to expand broadband into underserved small towns is critical to keep the momentum going.

At this critical moment for rural entrepreneurs, National Entrepreneurship Week should be a spotlight on the unique challenges and opportunities that exist for founders in small-town America. Rural entrepreneurship trends won’t turn around without a concerted effort to create the conditions for success, but there are signs that local leaders, funders and public policymakers are beginning to join together to do just that. 

Matt Dunne is the founder and executive director of the Center on Rural Innovation, which uses data analytics and engagement with rural community leaders to foster resilient prosperity in small-town America.